Author: SSESSMENTS

The US Energy Information Administration (EIA) on Wednesday reported the US oil inventories increased far more than expected last week due to weakened demand for fuel which forced refiners to cut run rates.

US crude stockpiles stood at 431.7 million barrels after increasing 3.5 million barrels in the week ended January 24. Analysts polled by Reuters previously estimated a 482,000-barrel build-up. This came amid weak demand for fuel in the US. Gasoline demand in the country decreased by 4.4% year-on-year in the last four weeks, while demand for distillate fuel fell by 8.3%, EIA reported.

The weak demand prompted refiners to cut their operating rates. Utilization rates among US refineries fell 3.3% last week to 87.2% of total capacity, while refinery crude runs dropped by 933,000 bpd, EIA said.

US gasoline inventories increased for a 12th consecutive week to a record high of 261.2 million barrels, rising by 1.2 million barrels, compared to analysts’ expectations of a 1.3 million-barrel increase.​ Distillate stocks declined 1.3 million barrels to 144.7 million barrels, a sharper drop than analysts’ estimates of a 1.1 million-barrel decline, EIA said.

Oil prices showed limited movement after the report. US crude futures lost 16 cents (0.3%) to $53.33/barrel as of 1550 GMT, while Brent edged up 27 cents to $59.78/barrel.